Applicability of Payment of Bonus Act, 1965

Pathikrit Naha (DGM - HR & ADMIN) 04 November 2010

Yes ,he can claim bonus subject to his salary should be Rs 10000/- per month or below. Here employee means who draws salary with in limit of Rs 10000/-. Bonus is now deferred wages as per legal clerification.

regards

P.NAHA

avancha_sri (n/a) 04 November 2010

The main condition in the Bonus Act is that the employee should work at least 30 days in that financial year and his wages should be less than or equal to 10,000 per month. Even if the employee worked for one month in that financial year is also eligible for bonus.

Srinivas

HR Manager

radha krishna (vp-hr) 06 November 2010

Yes a resigned employee is eligible to recieve bonus payable under Payment of Bonus Act, subject to fulfilling the conditions mentioned in the legislation.

Some employers pay amounts during Diwali as a good gesture/inam etc., which are not aprt of bonus under Pyament of Bonus Act. Resigned employees may not be considered for such amounts by the employers and legally one cannot claim such amounts.

Kirti Kar Tripathi (lawyer) 06 November 2010

I do not agree with Radha Krishna \'s view that even an Ex-gratia payment can be claimed by the employee, who has resigned after rendering a specified period as it has become part of his wages due to serving the perticular period.

RENISH RAO (ADVOCATE) 08 November 2010

You are right Tripathi ji..

ani (self employed) 10 November 2010

Hi friends,

I have worked for a company for more than a year. It was March 2009 when I joined and resigned April 2010. As per the above discussion I think I am elligible for the Bonus which was paid in the Company July 2010 for the financial year 2009-2010. After reading the discussion here, I have mailed my HR of that company and asked why the Bonus was not given to me. But no response or mail reply has been received from the HR.

Please advice what will be the next step. Should I send a legal notice with the help of an advocate or complain in the Labour court? Please advice.

thanks

Tushar Chowdhary (Lawyer/Consultant) 18 November 2010

One should also be aware of the fact that the company they are working should not be in its infancy period. If it is so the employer is not bound to pay any bonus.

Kirti Kar Tripathi (lawyer) 19 November 2010

Question of infancy period will arise, only when the bonus is asked under PBA. in case, it comes within the ambit of wages, no such question will arise.

ani (self employed) 19 November 2010

The Company, where I was employed is a renown company in India. It makes good profit every year and pay Bonus to the employees. This time also the Company paid to its employees.

Kirti Kar Tripathi (lawyer) 19 November 2010

yes, you are eligible for bonus but where you can seek remedy , this question is remained unanswered unless, the nature of work and designation is not disclosed.

Shivendra (Sr HR Executive) 22 November 2010

hello friends,

i have put this problem over this forum, jacob sir has solely answered me mentioning a section of Indian dispute act 1947, but sir i want few more cases in support of the stand that an Ex Gratia payment can be faught for, friends finding this particular case in same nature as the case being discussed here i am putting here hoping your valuable suggestions,

friends plz have details of the case below.........

"A friend (in fact a senior person) of mine worked with a 55 year old company at senior level & resigned on 20-04-2010. When He asked his company for the Bonus for the yeat 2009-10, he got refused & told that he is not eligible. He has worked for total 15 years in that organisation.
If such is a case then how all these years he used to get Bonus, because his salary was always above Rs.10000 pm from date of joining. Is there a clause in Bonus act that Bonus is not payable to employees who have resigned ."

sir i think he was not eligible for the payment of the bonus from the date he joined the organisation,

but he was being paid in the name of the bonus which we generally call an Ex Gratia payment,

sir, it is very true that an Ex Gratia payment is sweet will of the organisation and generally can not be pleaded against in case of "not payment" of it (but from the begining as far as i know),

"but in a comment over a section of the PoB Act 1965 i have read that an Ex Gratia payment can not be denied if it has been being paid for past several years"

i am putting this page from the act itself for refernce........

"" 8. Eligibility for bonus.-Every employee shall be entitled to be paid by his employer in an accounting year, bonus, in accordance with the provisions of this Act, provided he has worked in the establishment for not less than thirty working days in that year.

COMMENTS

(i) Workers, who have option to attend to work at the factory premises, are entitled to bonus. [M/s. Kale Khan Mohd. Hanif v. Jhansi Bidi Mazdoor Union 1980 Lab. I.C. 1973].

(ii) Season workers who have worked for not less than 30 working days, are entitled to bonus. U.K. Ginning & Pressing Factory v. P.O., 2nd Labour Court and Ors., (1991) 62F.L.R. 207 {Born.)].

(iii) Eligibility for bonus depends upon the employee having worked for at least 30 working days in the year.

(iv) There can be no condition against the statute. [Dewan's Modern Breweries Ltd. v. Industrial Tribunal & Ors., 1973 Lab.I.C. 129 (J&K)].

(v) The employees at the Head Office are entitled to bonus at the same rate at which the workers of factory have been given by virtue of settlement. [Hindustan Construction Co. Ltd. v. G.K. Potankar & Anr., A.I.R. 1976 S.C.907].

(vi) Employees working on part-time basis are eligible for bonus. [Arun Mills Ltd. v. Dr. Chandra Parshad C. Trivedi, (1976) 32F.L.R. 323].

(vii) A probationer is eligible for bonus. [Bank of Madura Ltd. v. Bank of Madura Employees' Union. 1970 Lab. I.C. 1215].

(viii) Every employee is entitled to bonus. [Mahabir Tiles Work v. Union of India, A.I.R. 1968 Ker. 143].

9. Disqualification for bonus.- Notwithstanding anything contained in this Act, an employee shall be disqualified from receiving bonus under this Act, if he is dismissed from service for-

(a) fraud; or

(b) riotous or violent behavior while on the premises of the establishment; or

(c) theft, misappropriation or sabotage of any property of the establishment.

COMMENTS

Bonus can be forfeited under section 9 only with reference to accounting year in which the employee committed fraud, theft, etc. [Himalaya Drug Co. v. P.O., 2nd Addl. Labour Court & Ors., (1986) 52F.L.R. 704].

¹[10. Payment of minimum bonus.-Subject to the other provisions of this Act, every employer shall be bound to pay to every employee in respect of the accounting year commencing on any day in the year 1979 and in respect of every subsequent accounting year, a minimum bonus which shall be 8.33 percent of the salary or wage earned by the employee during the accounting year or one hundred rupees, whichever is higher, whether or not the employer has any allocable surplus in the accounting year:

Provided that where an employee has not completed fifteen years of age at the beginning of the accounting year, the provisions of this section shall have effect in relation to such employee as if for the words "one hundred rupees", the words "sixty rupees" were substituted.

COMMENTS

(i) Ex-gratia bonus is not a bonus within the meaning of section 10 of the Act. [R.P.C. Officers' Association v. R.F.C. and Ors., 1990 L.L.R 222 (Raj.)].

(ii) If employees have been getting ex-gratia bonus for last many a years, its payment cannot be stopped. [ibid.]

Claim for the minimum bonus lies to the Labour Court under section 33C(2) of the Industrial Disputes Act, 1947. [Kohinoor Tobacco Productions Ltd. v. P.0., 2nd Labour Court, 1986 Lab. I.C. 1055 (Bom.)]. ""

sir please see the lines above which are in this color

pleae advice me about the pursuance of the organisation for the payment of bonus.........

with thanks and regards

shivendra

Kavita (Assistant manager) 24 November 2010

Dear Pathikrit,

As you have mentioned one can claim bonus subject to his salary should be Rs 10000/- per month or below. Here employee means who draws salary with in limit of Rs 10000/-.

Please clarify if this Salary is Basic salary and what other compnents of salary?

If it is a basic salary then I suppose you are talking about basic per month salary??

Please confirm

Kavita (Assistant manager) 24 November 2010

Dear Pathikrit,

As you have mentioned one can claim bonus subject to his salary should be Rs 10000/- per month or below. Here employee means who draws salary with in limit of Rs 10000/-.

Please clarify if this Salary is Basic salary and what other compnents of salary?

If it is a basic salary then I suppose you are talking about basic per month salary??

Please confirm

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